Cooperative societies are more regulated than partnerships. They also tend to be geared towards a specific industry or type of business, whereas partnerships can be more general in nature. Also cooperative societies typically have a larger membership base than partnerships.
What is a cooperative society?
A cooperative society is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit. They are motivated by the satisfaction of their common needs and aspirations rather than by profit or private gain. In addition to fulfilling their members’ needs, cooperatives improve the quality of life for their employees and communities.
In a cooperative society, the business is owned by the members who use its services or products. The members elect a board of directors to oversee the business, and the board hires staff to manage day-to-day operations. The profits of the business are distributed among the members based on their use of the cooperative’s services or products.
What is a partnership?
A partnership is defined as an association of two or more people carrying on business together with a view to profit. Each partner contributes money, labor, or property and share equally in the profits and losses of the business, and each partner is liable for the debts of the business.
How a cooperative society and a partnership differ
The main difference between a partnership and a cooperative society is that in a partnership, each partner has unlimited liability for the debts and obligations of the business, while in a cooperative society, liability is limited to the amount of capital contributed by each member.
The benefits of each type of organization
The benefits of a cooperative society are that it is a democratic organization, all members have an equal say in how the business is run, and profits are distributed equally among members. The downside of a cooperative society is that it can be more difficult to raise capital, as members may be reluctant to invest money in the business.
The benefits of a partnership are that partners can pool their resources and expertise to start and grow the business. Partnerships also offer flexibility in how the business is run, as partners can agree on different roles and responsibilities.
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